[Federal Register Volume 73, Number 85 (Thursday, May 1, 2008)]
[Notices]
[Pages 24042-24048]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-9597]


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DEPARTMENT OF COMMERCE

International Trade Administration

A-570-831


Fresh Garlic from the People's Republic of China: Preliminary 
Results of the 12th New Shipper Reviews

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (``Department'') is conducting new 
shipper reviews (``NSRs'') of the antidumping duty order on fresh 
garlic from the People's Republic of China (``PRC'') that cover the 
period of review (``POR'') of November 1, 2006 through April 30, 2007. 
See Antidumping Duty Order: Fresh Garlic From the People's Republic of 
China, 59 FR 59209 (November 16, 1994) (``Order''). On June 29, 2007, 
the Department initiated semi-annual new shipper reviews for Shandong 
Chenhe International Trading Co., Ltd. (``Chenhe''), Qingdao 
Tiantaixing Foods Co., Ltd. (``QTF''), Hebei Golden Bird Trading Co., 
Ltd. (``Golden Bird''), Jining Yongjia Trade Co., Ltd. (``Yongjia'') 
and Shenzhen Greening Trading Co., Ltd. (``Greening''). See Fresh 
Garlic from the People's Republic of China: Initiation of Antidumping 
Duty New Shipper Reviews, 72 FR 38057 (July 12, 2007) (``Initiation of 
NSRs'').
    We preliminarily determine that Golden Bird, Greening, QTF and 
Yongjia have made sales in the United States at less than normal value 
(``NV''). We also preliminarily determine that Chenhe has not made 
sales in the United States at less than NV. If these preliminary 
results are adopted in our final results of review, we will instruct 
U.S. Customs and Border Protection (``CBP'') to assess antidumping 
duties on entries of subject merchandise during the POR for which the 
importer-specific assessment rates are above de minimis.

EFFECTIVE DATE: May 1, 2008.

FOR FURTHER INFORMATION CONTACT: Julia Hancock and Paul Walker, AD/CVD 
Operations, Office 9, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
1394 and (202) 482-0413, respectively.

SUPPLEMENTARY INFORMATION:

Case History

General Background

    On May 17, May 21 and May 28, 2007, the Department received 
requests for new shipper reviews from Chenhe, QTF, Golden Bird, 
Yongjia, and Greening, respectively. On June 12, 2007, the Department 
requested additional information from QTF, Golden Bird, and QTF, 
respectively regarding their new shipper review submissions. On June 
13, 2007, Petitioners\1\ submitted comments regarding Chenhe's, QTF's, 
Golden Bird's, and Yongjia's new shipper submissions.
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    \1\ The Fresh Garlic Producers Association and its individual 
members: Christopher Ranch LLC, the Garlic Company, Valley Garlic 
and Vessey and Company, (collectively known as ``Petitioners'').
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    On June 14, 2007, QTF, Golden Bird, and Yongjia submitted 
additional information regarding their new shipper review submissions. 
Additionally, on June 19 and June 21, 2007, QTF, Golden Bird, Yongjia, 
and Chenhe submitted letters regarding Petitioners' June 13, 2007 
comments. On June 29, 2007, the Department initiated semi-annual new 
shipper reviews of QTF, Golden Bird, Yongjia, Chenhe, and Greening. See 
Initiation of NSRs, 72 FR 38057.
    On July 2, 2007, after initiating the reviews, the Department 
issued antidumping duty questionnaires to the five companies 
participating in the new shipper reviews. The Department subsequently 
issued supplemental questionnaires and received responses from all 
companies under review between September 2007 and March 2008.

Extension of Preliminary Results

    On November 16, 2007, the Department extended the preliminary 
results of these new shipper reviews to March 25, 2008. See Fresh 
Garlic from the People's Republic of China: Extension of Time Limits 
for the Preliminary Results of the New Shipper Reviews, 72 FR 64579 
(November 16, 2007). Additionally, on March 6, 2008, the Department 
extended the preliminary results a second time to April 24, 2008. See 
Fresh Garlic from the People's Republic of China: Extension of Time 
Limits for the Preliminary Results of the New Shipper Reviews, 73 FR 
12079 (March 6, 2008).

Expansion of the POR

    On April 23, 2008, we issued a memorandum extending the end of the 
POR from April 30, 2007 to May 17, 2007, to capture entries of two of 
the new shippers' merchandise into the United States market. See 
Memorandum to the File from Julia Hancock, Senior Analyst, through 
Catherine Bertrand, Program Manager, Office 9: Expansion of the Period 
of Review in the New Shipper Reviews of Fresh Garlic from the People's 
Republic of China, (April 23, 2008).

Surrogate Country and Surrogate Values

    On August 23, 2007, the Department sent interested parties a letter 
requesting comments on the surrogate country and information pertaining 
to valuing factors of production.
    On October 31, 2007, QTF, Yongjia, and Golden Bird submitted 
comments on the surrogate country and information pertaining to valuing 
factors of production. Additionally, on November 26, 2007, the 
Department extended the deadline to submit information pertaining to 
valuing factors of production to December 17, 2007.
    On December 17, 2007, Petitioners submitted information pertaining 
to valuing factors of production. On December 17 and December 27, 2007, 
Chenhe submitted information and rebuttal comments pertaining to 
valuing factors of production. No other party has submitted surrogate 
values or surrogate country comments on the record of this proceeding.

Scope of the Order

    The products covered by this Order are all grades of garlic, whole 
or separated into constituent cloves, whether or not peeled, fresh, 
chilled, frozen, provisionally preserved, or packed in water or other 
neutral substance, but not prepared or preserved by the addition of 
other ingredients or heat processing. The differences between grades 
are based on color, size, sheathing, and level of

[[Page 24043]]

decay. The scope of this order does not include the following: (a) 
garlic that has been mechanically harvested and that is primarily, but 
not exclusively, destined for non-fresh use; or (b) garlic that has 
been specially prepared and cultivated prior to planting and then 
harvested and otherwise prepared for use as seed. The subject 
merchandise is used principally as a food product and for seasoning. 
The subject garlic is currently classifiable under subheadings 
0703.20.0010, 0703.20.0020, 0703.20.0090, 0710.80.7060, 0710.80.9750, 
0711.90.6000, and 2005.90.9700 of the Harmonized Tariff Schedule of the 
United States (``HTSUS''). Although the HTSUS subheadings are provided 
for convenience and customs purposes, our written description of the 
scope of this order is dispositive. In order to be excluded from the 
Order, garlic entered under the HTSUS subheadings listed above that is 
(1) mechanically harvested and primarily, but not exclusively, destined 
for non-fresh use or (2) specially prepared and cultivated prior to 
planting and then harvested and otherwise prepared for use as seed must 
be accompanied by declarations to CBP to that effect.

Verification

    Following the publication of these preliminary results, we intend 
to verify, as provided in section 782(i)(3) of the Tariff Act of 1930, 
as amended, (``the Act''), sales and cost information submitted by 
respondents, as appropriate. At verification, we will use standard 
verification procedures, including on-site inspection of the 
manufacturer's facilities, the examination of relevant sales and 
financial records, and the selection of original source documentation 
containing relevant information. We will prepare verification reports 
outlining our verification results and place these reports on file in 
the Central Records Unit, room 1117 of the main Commerce building.

Bona Fide Analysis

    Consistent with the Department's practice, we investigated the bona 
fide nature of the sale made by each new shipper, Chenhe, Greening, 
Golden Bird, QTF, and Yongjia, respectively for these reviews. In 
evaluating whether or not a single sale in a new shipper review is 
commercially reasonable, and therefore bona fide, the Department 
considers, inter alia, such factors as: (1) the timing of the sale; (2) 
the price and quantity; (3) the expenses arising from the transaction; 
(4) whether the goods were resold at a profit; and (5) whether the 
transaction was made on an arm's-length basis. See Tianjin Tiancheng 
Pharmaceutical Co., Ltd. v. United States, 366 F. Supp. 2d 1246, 1250 
(CIT 2005). Accordingly, the Department considers a number of factors 
in its bona fides analysis, ``all of which may speak to the commercial 
realities surrounding an alleged sale of subject merchandise.'' See 
Hebei New Donghua Amino Acid Co., Ltd. v. United States, 374 F. Supp. 
2d 1333, 1342 (CIT 2005) (citing Fresh Garlic From the People's 
Republic of China: Final Results of Antidumping Administrative Review 
and Rescission of New Shipper Review, 67 FR 11283 (March 13, 2002) and 
accompanying Issues and Decision Memorandum).
    We preliminarily find that the new shipper sales made by Chenhe, 
Greening, Golden Bird, QTF, and Yongjia, respectively, were made on a 
bona fide basis. Specifically, we found that: (1) the price and 
quantity of each new shipper sale was within the range of the prices 
and quantities of other entries of subject merchandise from the PRC 
into the United States during the POR; (2) the new shipper and its 
customer did not incur any extraordinary expenses arising from the 
transaction; (3) each new shipper sale was made between unaffiliated 
parties at arm's length; (4) there is no record evidence that indicates 
that each new shipper sale was not made based on commercial principles; 
(5) the sale was resold at a profit; and (6) the timing of each new 
shipper sale is not an indicator of a sale made on a non-bona fide 
basis.\2\ Based on our investigation into the bona fide nature of each 
new shipper sale, the questionnaire responses submitted by each new 
shipper, as well as each new shipper's eligibility for a separate rate 
(see Separate Rates Determination section below) and the Department's 
determination that each new shipper was not affiliated with any 
exporter or producer that had previously shipped subject merchandise to 
the United States, we preliminarily determine that each new shipper has 
met the requirements to qualify as a new shipper during the POR. 
Therefore, for purposes of these preliminary results, we are treating 
each new shipper's sale of subject merchandise to the United States as 
an appropriate transaction for these reviews.
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    \2\ See Memorandum from Julia Hancock, Senior Case Analyst, 
Office 9, to James C. Doyle, Director, Office 9, ``Antidumping Duty 
New Shipper Review of Fresh Garlic from the People's Republic of 
China: Bona Fide Nature of the Sale Under Review for Shandong Chenhe 
International Trading Co., Ltd.,'' dated April 22, 2008; Memorandum 
from Paul Walker, Senior Case Analyst, Office 9, to James C. Doyle, 
Director, Office 9, ``Antidumping Duty New Shipper Review of Fresh 
Garlic from the People's Republic of China: Bona Fide Nature of the 
Sale Under Review for Qingdao Tiantaixing Foods Co., Ltd.,'' dated 
April 22, 2008; Memorandum from Paul Walker, Senior Case Analyst, 
Office 9, to James C. Doyle, Director, Office 9, ``Antidumping Duty 
New Shipper Review of Fresh Garlic from the People's Republic of 
China: Bona Fide Nature of the Sale Under Review for Hebei Golden 
Bird Trading Co., Ltd.,'' dated April 22, 2008; Memorandum from Paul 
Walker, Senior Case Analyst, Office 9, to James C. Doyle, Director, 
Office 9, ``Antidumping Duty New Shipper Review of Fresh Garlic from 
the People's Republic of China: Bona Fide Nature of the Sale Under 
Review for Jining Yongjia Trade Co., Ltd.,'' dated April 22, 2008; 
and, Memorandum from Paul Walker, Senior Case Analyst, Office 9, to 
James C. Doyle, Director, Office 9, ``Antidumping Duty New Shipper 
Review of Fresh Garlic from the People's Republic of China: Bona 
Fide Nature of the Sale Under Review for Shenzhen Greening Trading 
Co., Ltd.,'' dated April 22, 2008.
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Non-Market Economy Country Status

    In every case conducted by the Department involving the PRC, the 
PRC has been treated as a non-market economy (``NME'') country. In 
accordance with section 771(18)(C)(i) of the Act, any determination 
that a foreign country is an NME country shall remain in effect until 
revoked by the administering authority. See Brake Rotors From the 
People's Republic of China: Final Results and Partial Rescission of the 
2004/2005 Administrative Review and Notice of Rescission of 2004/2005 
New Shipper Review, 71 FR 66304 (November 14, 2006). None of the 
parties to this proceeding has contested such treatment. Accordingly, 
we calculated NV in accordance with section 773(c) of the Act, which 
applies to NME countries.

Separate Rates Determination

    A designation of a country as an NME remains in effect until it is 
revoked by the Department. See section 771(18)(C) of the Act. 
Accordingly, there is a rebuttable presumption that all companies 
within the PRC are subject to government control and, thus, should be 
assessed a single antidumping duty rate.
    It is the Department's standard policy to assign all exporters of 
the merchandise subject to review in NME countries a single rate unless 
an exporter can affirmatively demonstrate an absence of government 
control, both in law (de jure) and in fact (de facto), with respect to 
exports. To establish whether a company is sufficiently independent to 
be entitled to a separate, company-specific rate, the Department 
analyzes each exporting entity in an NME country under the test 
established in the Final Determination of Sales at Less than Fair 
Value: Sparklers from the People's Republic of China (``Sparklers''), 
56 FR 20588 (May 6, 1991), as amplified by the Notice of Final 
Determination of Sales at Less

[[Page 24044]]

Than Fair Value: Silicon Carbide from the People's Republic of China, 
59 FR 22585 (May 2, 1994) (``Silicon Carbide'').

A. Absence of De Jure Control

    The Department considers the following de jure criteria in 
determining whether an individual company may be granted a separate 
rate: (1) an absence of restrictive stipulations associated with an 
individual exporter's business and export licenses; and (2) any 
legislative enactments decentralizing control of companies.
    Throughout the course of this proceeding, the new shippers have 
placed a number of documents on the record to demonstrate absence of de 
jure control including business licenses, financial statements, and 
narrative information regarding government laws and regulations on 
corporate ownership, and the companies' operations and selection of 
management. Specifically, the new shippers have placed on the record 
the ``Foreign Trade Law of the People's Republic of China'' and the 
``Administrative Regulations of the People's Republic of China 
Governing the Registration of Legal Corporations.'' The Department has 
analyzed such PRC laws and found that they establish an absence of de 
jure control. See, e.g., Honey from the People's Republic of China: 
Preliminary Results and Partial Rescission of Antidumping Duty 
Administrative Review, 72 FR 102, 105 (January 3, 2006), unchanged in 
Honey from the People's Republic of China: Final Results and Final 
Rescission, In Part, of Antidumping Duty Administrative Review, 72 FR 
37715, 37716 (July 11, 2007). We have no information in this proceeding 
that would cause us to reconsider this determination. Thus, we believe 
that the evidence on the record supports a preliminary finding of an 
absence of de jure government control based on: (1) an absence of 
restrictive stipulations associated with the exporter's business 
license; and (2) the legal authority on the record decentralizing 
control over the respondent.

B. Absence of De Facto Control

    The absence of de facto governmental control over exports is based 
on whether a company: (1) sets its own export prices independent of the 
government and other exporters; (2) retains the proceeds from its 
export sales and makes independent decisions regarding the disposition 
of profits or financing of losses; (3) has the authority to negotiate 
and sign contracts and other agreements; and (4) has autonomy from the 
government regarding the selection of management. See Silicon Carbide, 
59 FR at 22587 and Sparklers, 56 FR at 20589; see also Notice of Final 
Determination of Sales at Less Than Fair Value: Furfuryl Alcohol From 
the People's Republic of China, 60 FR 22544, 22545 (May 8, 1995).
    The Department conducted a separate-rates analysis for each new 
shipper. In their questionnaire responses, each new shipper submitted 
evidence indicating an absence of de facto governmental control over 
its export activities. Specifically, this evidence indicates that: (1) 
each new shipper sets its own export prices independent of the 
government and without the approval of a government authority; (2) each 
new shipper retains the proceeds from its sales and makes independent 
decisions regarding the disposition of profits or financing of losses; 
(3) each new shipper has a general manager, branch manager or division 
manager with the authority to negotiate and bind the company in an 
agreement; (4) the general manager is selected by the board of 
directors or company employees, and the general manager appoints the 
deputy managers and the manager of each department; and (5) there is no 
restriction on each new shipper's use of export revenues. The 
questionnaire responses of each new shipper do not suggest that pricing 
is coordinated among exporters. During our analysis of the information 
on the record, we found no information indicating the existence of 
government control. Therefore, the Department preliminarily finds that 
each new shipper has established, prima facie, that they qualify for 
separate rates under the criteria established by Silicon Carbide and 
Sparklers.

Surrogate Country

    When the Department is investigating imports from an NME country, 
section 773(c)(1) of the Act directs it to base NV, in most 
circumstances, on the NME producer's factors of production (``FOPs''), 
valued in a surrogate market economy country or countries considered to 
be appropriate by the Department. In accordance with section 773(c)(4) 
of the Act, in valuing the FOPs, the Department shall utilize, to the 
extent possible, the prices or costs of FOPs in one or more market 
economy countries that are: (1) at a level of economic development 
comparable to that of the NME country; and (2) significant producers of 
comparable merchandise. The sources of the surrogate factor values are 
discussed under the ``Normal Value'' section below and in the 
Memorandum to the File from Paul Walker, Senior Analyst, Office 9, 
``New Shipper Review of Fresh Garlic from the People's Republic of 
China: Surrogate Values for the Preliminary Results,'' dated April 22, 
2008 (``Factor Valuation Memo'').
    As discussed in the ``Separate Rates'' section, above, the 
Department considers the PRC to be an NME country. The Department has 
treated the PRC as an NME country in all previous antidumping 
proceedings. In accordance with section 771(18)(C)(i) of the Act, any 
determination that a foreign country is an NME country shall remain in 
effect until revoked by the administering authority. None of the 
parties to this proceeding contested such treatment. Accordingly, we 
treated the PRC as an NME country for purposes of these reviews and 
calculated NV, pursuant to section 773(c) of the Act, by valuing the 
FOPs in a surrogate country.
    The Department determined that India, Sri Lanka, Indonesia, 
Philippines, and Egypt are countries comparable to the PRC in terms of 
economic development. See Memorandum from Ron Lorentzen, Director, 
Office of Policy, to Alex Villanueva, Program Manager, China/NME Group, 
Office 9, ``Antidumping Administrative Review of Fresh Garlic from the 
People's Republic of China: Request for a List of Surrogate 
Countries,'' dated August 1, 2007. Moreover, it is the Department's 
practice to select an appropriate surrogate country based on the 
availability and reliability of data from the countries. See Department 
Policy Bulletin No. 04.1: Non-Market Economy Surrogate Country 
Selection Process (March 1, 2004).
    In this case, the Department has found that India and Egypt are 
both significant producers of comparable merchandise. The Department 
finds India to be a reliable source for surrogate values because India 
is at a similar level of economic development pursuant to 773(c)(4) of 
the Act, is a significant producer of comparable merchandise, and has 
publicly available and reliable data. Furthermore, the Department notes 
that India has been the primary surrogate country in past segments, and 
the only surrogate value data submitted on the record are from Indian 
sources. Given the above facts, the Department is preliminarily 
selecting India as the surrogate country for the PRC on the basis that: 
(1) it is at a similar level of economic development pursuant to 
section 773(c)(4) of the Act; (2) it is a significant producer of 
comparable merchandise; and (3) we have reliable data from India that 
we can use to value the FOPs.

[[Page 24045]]

Fair Value Comparisons

    To determine whether sales of the subject merchandise made by 
Chenhe, Greening, Golden Bird, QTF, and Yongjia to the United States 
were at prices below NV, we compared each company's export price 
(``EP'') to NV, as described below.

U.S. Price

    In accordance with section 772(a) of the Act, we calculated the EP 
for sales to the United States for Chenhe, Greening, Golden Bird, QTF, 
and Yongjia because the first sale to an unaffiliated party was made 
before the date of importation and the use of constructed EP (``CEP'') 
was not otherwise warranted. We calculated EP based on the price to 
unaffiliated purchasers in the United States. In accordance with 
section 772(c) of the Act, as appropriate, we deducted from the 
starting price to unaffiliated purchasers foreign inland freight, and 
brokerage and handling. For Chenhe, Greening, Golden Bird, QTF, and 
Yongjia, each of these services was either provided by an NME vendor or 
paid for using an NME currency. Thus, we based the deduction of these 
movement charges on surrogate values. See Factor Valuation Memo for 
details regarding the surrogate values for movement expenses. 
Additionally, Chenhe reported certain U.S. Customs duties, U.S. 
brokerage and handling, and other expenses that must be deducted from 
the starting price to unaffiliated purchasers. Accordingly, we will 
deduct these expenses from the starting price to unaffiliated 
purchasers, as reported by Chenhe. See Memorandum to the File from 
Julia Hancock, Senior Analyst, Office 9, ``Company Analysis Memorandum 
in the Antidumping Duty New Shipper Review of Fresh Garlic from the 
People's Republic of China (``PRC''): Shandong Chenhe,'' dated April 
22, 2008.

Normal Value

A. Methodology

    Section 773(c)(1) of the Act provides that the Department shall 
determine NV using an FOP methodology if the merchandise is exported 
from an NME country and the information does not permit the calculation 
of NV using home market prices, third-country prices, or constructed 
value under section 773(a) of the Act. The Department calculates NV 
using each of the FOPs that a respondent consumes in the production of 
a unit of the subject merchandise because the presence of government 
controls on various aspects of NMEs renders price comparisons and the 
calculation of production costs invalid under the Department's normal 
methodologies. However, there are circumstances in which the Department 
will modify its standard FOP methodology, choosing to apply a surrogate 
value to an intermediate input instead of the individual FOPs used to 
produce that intermediate input. In some cases, a respondent may report 
factors used to produce an intermediate input that account for an 
insignificant share of total output. When the potential increase in 
accuracy to the overall calculation that results from valuing each of 
the FOPs is outweighed by the resources, time, and burden such an 
analysis would place on all parties to the proceeding, the Department 
has valued the intermediate input directly using a surrogate value. See 
Notice of Final Determination of Sales at Less Than Fair Value: 
Polyvinyl Alcohol from the People's Republic of China, 68 FR 47538 
(August 11, 2003), and accompanying Issues and Decision Memorandum at 
Comment 1 (citing to Final Results of First New Shipper Review and 
First Antidumping Duty Administrative Review: Certain Preserved 
Mushrooms from the People's Republic of China, 66 FR 31204 (June 11, 
2001)).
    In the 9\th\ administrative review, the Department recognized that 
there were serious discrepancies between the reported FOPs of the 
different respondents and that the standard FOP methodology might not 
be adequate to apply in future reviews. See Fresh Garlic from the 
People's Republic of China: Final Results of Antidumping Duty 
Administrative Review, 70 FR 34082 (June 13, 2005). In the 10\th\ 
administrative review, the Department conducted a ``harvest 
verification'' of several garlic producers in the PRC, interviewing 
farmers, studying farming techniques, and reviewing standard PRC garlic 
production record-keeping.\3\ In analyzing the questionnaire responses 
and ``harvest verification'' reports in the 10\th\ administrative 
review, the Department determined that, to capture the complete costs 
of producing fresh garlic, the methodology of valuing the intermediate 
product, the fresh garlic bulb, would more accurately capture the 
complete costs of producing subject merchandise. See Fresh Garlic from 
the People's Republic of China: Final Results and Partial Rescission of 
Antidumping Duty Administrative Review and Final Results of New Shipper 
Reviews, 71 FR 26329 (May 4, 2006) (``10\th\ Review Final Results''), 
and accompanying Issues and Decision Memorandum at Comment 1. In the 
two previous administrative reviews, the Department also stated that 
``should a respondent be able to provide sufficient factual evidence 
that it maintains the necessary information in its internal books and 
records that would allow us to establish the completeness and accuracy 
of the reported FOPs, we will revisit this issue and consider whether 
to use its reported FOPs in the calculation of NV.'' See 10\th\ Review 
Final Results, 71 FR at 26331; Fresh Garlic from the People's Republic 
of China: Partial Rescission and Preliminary Results of the Eleventh 
Administrative Review and New Shipper Reviews, 71 FR 71510, 71520 
(December 11, 2006).
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    \3\ See Memorandum to the File from Julia Hancock, Senior Case 
Analyst; Intermediate Input Methodology Memoranda from the 10th 
Administrative Review Final Results and 11th Administrative Review 
Preliminary Results (April 22, 2008), in which the Department placed 
the Intermediate Input Methodology memos from the tenth and eleventh 
Administrative Reviews on the record of this proceeding, inclusive 
of the verification reports resulting from the ``harvest 
verification.''
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    In the course of these reviews, the Department has requested and 
obtained detailed information from the respondents with respect to each 
company's garlic production practices. Questionnaire responses revealed 
that only Yongjia had farming operations to grow fresh garlic.\4\ 
However, based on our analysis of the information on the record and for 
the reasons outlined in the Memorandum to James C. Doyle, Director, 
Office 9, from Paul Walker, Senior Case Analyst, Office 9, ``New 
Shipper Reviews of the Antidumping Duty Order on Fresh Garlic From the 
People's Republic of China: Intermediate Input Methodology,'' dated 
April 22, 2008 (``Intermediate Product Memo''), we continue to believe 
that the sole respondent that farmed garlic, Yongjia, was unable to 
accurately record and substantiate the complete costs of growing garlic 
during the POR.
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    \4\ Specifically, Chenhe, Greening, QTF, and Golden Bird are all 
processors and exporters of fresh garlic that purchased whole garlic 
bulbs and processed it for export. Consequently, the FOPs provided 
by each all begin with whole garlic bulbs and not the factors that 
are used to grow whole garlic bulbs.
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    Thus, in the preliminary results for these new shipper reviews, in 
order to eliminate the distortions in our calculation of NV, for all of 
the reasons identified above and described in the Intermediate Product 
Memo, the Department applied an ``intermediate-product valuation 
methodology'' to all companies. Using this methodology, the Department 
calculated NV by starting with a surrogate value for the garlic bulb

[[Page 24046]]

(i.e., the ``intermediate product''), adjusted for yield losses during 
the processing stages, and adding the respondents' processing costs, 
which were calculated using their reported usage rates for processing 
fresh garlic. For a complete explanation of the Department's analysis, 
and for a more detailed analysis of these issues with respect to each 
respondent, see the Intermediate Product Memo.

B. Factor Valuations

    In accordance with section 773(c) of the Act, the Department 
calculated NV based on the intermediate product value and processing 
FOPs reported by the respondents for the POR. To calculate NV, the 
Department multiplied the reported per-unit factor quantities by 
publicly available surrogate values in India with the exception of the 
surrogate value for ocean freight, which we obtained from an 
international freight company. In selecting the surrogate values, the 
Department considered the quality, specificity, and contemporaneity of 
the data. As appropriate, the Department adjusted input prices by 
including freight costs to make them delivered prices. The Department 
calculated these freight costs based on the shorter of the reported 
distance from the domestic supplier to the factory or the distance from 
the port in accordance with the decision in Sigma Corporation v. United 
States, 117 F.3d 1401 (Fed. Cir. 1997). The Department made currency 
conversions into U.S. dollars, in accordance with section 773A(a) of 
the Act, based on the exchange rates in effect on the dates of the U.S. 
sale(s) as certified by the U.S. Federal Reserve Bank.
    Additionally, during the POR, Greening purchased all of certain 
inputs from a market economy supplier and paid for the inputs in a 
market economy currency. The Department has instituted a rebuttable 
presumption that market economy input prices are the best available 
information for valuing an input when the total volume of the input 
purchased from all market economy sources during the period of 
investigation or review exceeds 33 percent of the total volume of the 
input purchased from all sources during the period. In these cases, 
unless case-specific facts provide adequate grounds to rebut the 
Department's presumption, the Department will use the weighted-average 
market economy purchase price to value the input. Alternatively, when 
the volume of an NME firm's purchases of an input from market economy 
suppliers during the period is below 33 percent of its total volume of 
purchases of the input during the period, but where these purchases are 
otherwise valid and there is no reason to disregard the prices, the 
Department will weight-average the weighted-average market economy 
purchase price with an appropriate surrogate value (``SV'') according 
to their respective shares of the total volume of purchases, unless 
case-specific facts provide adequate grounds to rebut the presumption. 
When a firm has made market economy input purchases that may have been 
dumped or subsidized, are not bona fide, or are otherwise not 
acceptable for use in a dumping calculation, the Department will 
exclude them from the numerator of the ratio to ensure a fair 
determination of whether valid market economy purchases meet the 33-
percent threshold. See Antidumping Methodologies: Market Economy 
Inputs, Expected Non-Market Economy Wages, Duty Drawback; and Request 
for Comments, 71 FR 61716, 61717-18 (October 19, 2006).
    Accordingly, we valued Greening's inputs using the market economy 
prices paid for the inputs where the total volume of the input 
purchased from all market economy sources during the POI exceeded 33 
percent of the total volume of the input purchased from all sources 
during that period. Where appropriate, we increased the market economy 
prices of inputs by freight expenses. See Factor Valuation Memorandum. 
For a detailed description of all actual values used for market-economy 
inputs, see Memorandum to the File from Julia Hancock, Senior Analyst, 
Office 9, ``Company Analysis Memorandum in the Antidumping Duty New 
Shipper Review of Fresh Garlic from the People's Republic of China 
(``PRC''): Shenzhen Greening,'' dated April 22, 2008.
    Moreover, in applying the intermediate input methodology, the 
Department sought foremost to identify the best available surrogate 
value for the fresh garlic bulb input to production, as opposed to 
identifying a surrogate value for garlic seed. Therefore, the 
Department has valued the fresh garlic bulb using prices for the size 
range ``super-A'' grade garlic bulb in India, as published by Azadpur 
Agriculture Produce Marketing Committee (``APMC'') in its ``Market 
Information Bulletin'' (the ``Bulletin''). Azadpur APMC is the largest 
fruit and vegetable market in Asia and has become a ``National 
Distribution Centre'' for important Indian agricultural products such 
as garlic. The Bulletin is published by the Azadpur APMC on each 
trading day and contains, among other things, a list of all fruits and 
vegetables sold on the previous trading day, the amount (by weight) of 
each fruit or vegetable sold on that day, and a low, high and modal 
price for each commodity sold. The Department notes that the ``A'' 
grade garlic typically ranges from 40 - 55 millimeters (``mm'') in 
diameter, and the ``super-A'' grade garlic ranges from 40 mm and above 
in diameter. However, the Department also finds that garlic that ranges 
from 55 mm in diameter and above is the ``super-A'' grade garlic. See 
Memorandum to the File from Julia Hancock, ``Placing Market Research 
Report on the Record,'' dated April 22, 2008.
    As the Department determined in past reviews, the price at which 
garlic is sold is heavily dependent upon physical characteristics such 
as bulb size. See, e.g., 10\th\ Review Final Results, 71 FR 26329 at 
Comment 2; Fresh Garlic from the People's Republic of China: Final 
Results and Partial Rescission of the Eleventh Administrative Review 
and New Shipper Reviews, 72 FR 34438, 34440 (June 22, 2007) (``11\th\ 
Review Final Results''), and accompanying Issues and Decision 
Memorandum at Comment 2. Accordingly, the Department finds that it is 
important to use surrogate Indian garlic values reflecting sales of 
garlic bulbs of similar diameter to that of Chenhe, Greening, Golden 
Bird, QTF, and Yongjia merchandise during the POR. Therefore, for these 
preliminary results, the Department finds that the ``super-A'' grade 
garlic data from Azadpur APMC are the best available and most 
appropriate information on the record to value the garlic bulb input, 
pursuant to section 773(c) of the Act, for the reasons stated below. 
The Department has found that the data from Azadpur APMC satisfy the 
Department's surrogate value selection criteria. See 11\th\ Review 
Final Results at Comment 2.
    Because the Department is able to identify the grades of Indian 
garlic that correspond to various diameter ranges and because Chenhe, 
Greening, Golden Bird, QTF, and Yongjia reported the size of the garlic 
bulb they sold during the POR, the Department is calculating the 
surrogate value for the garlic bulb input using a simple average of the 
Azadpur APMC data for ``super-A'' grade garlic for Chenhe, Greening, 
Golden Bird, QTF, and Yongjia. For further discussion of the 
Department's calculation for the surrogate value for the garlic bulb, 
as well as other surrogate values used, see the Factor Valuation Memo.

Preliminary Results of the Reviews

    As a result of our review, we preliminarily find that the following

[[Page 24047]]

margins exist for the period November 1, 2006 through May 17, 2007\5\:
---------------------------------------------------------------------------

    \5\ The POR has been extended until May 17, 2007, so as to 
capture entries from Chenhe and Greening which, though shipped prior 
to April 30, 2007 did not enter the U.S. market until after, 
respectively. See Memorandum to the File from Julia Hancock, Senior 
Case Analyst, Office 9, ``Expansion of the Period of Review in the 
New Shipper Reviews of Fresh Garlic from the People's Republic of 
China,'' dated April 23, 2008.

                        Fresh Garlic from the PRC
------------------------------------------------------------------------
                                                            Weighted-
                 Exporter/Manufacturer                    Average Margin
                                                            (Percent)
------------------------------------------------------------------------
Exported and Produced by Shandong Chenhe International            0.00
 Trading Co., Ltd......................................
Exported and Produced by Qingdao Tiantaixing Foods Co.,          32.85
 Ltd...................................................
Exported by Hebei Golden Bird Trading Co., Ltd. and              13.89
 Produced by Cangshan County Hongyang Vegetables &
 Foods Co., Ltd........................................
Exported by Jining Yongjia Trade Co., Ltd. and Produced          18.94
 by Jinxiang County Shanfu Frozen Co., Ltd.............
Exported and Produced by Shenzhen Greening Trading Co.,           2.15
 Ltd...................................................
------------------------------------------------------------------------

The Department will disclose to parties of this proceeding the 
calculations performed in reaching the preliminary results within five 
days of the date of publication of this notice in accordance with 19 
CFR 351.224(b).
    In accordance with 19 CFR 351.301(c)(3)(ii), for the final results 
in an antidumping duty new shipper review, interested parties may 
submit publicly available information to value FOPs within 20 days 
after the date of publication of these preliminary results. Interested 
parties must provide the Department with supporting documentation for 
the publicly available information to value each FOP. Additionally, in 
accordance with 19 CFR 351.301(c)(1), for the final results of this new 
shipper review, interested parties may submit factual information to 
rebut, clarify, or correct factual information submitted by an 
interested party less than ten days before, on, or after, the 
applicable deadline for submission of such factual information. The 
Department notes that 19 CFR 351.301(c)(1) permits new information only 
insofar as it rebuts, clarifies, or corrects information recently 
placed on the record. Therefore, parties should take note that new 
surrogate value data that are introduced following the 20-day deadline 
generally will not fall within the meaning and applicability of 19 CFR 
351.301(c)(1). See Glycine from the People's Republic of China: Final 
Results of Antidumping Duty Administrative Review and Final Rescission, 
in Part, 72 FR 58809 (October 17, 2007) and accompanying Issues and 
Decision Memorandum at Comment 2.
    Interested parties may submit case briefs and/or written comments 
no later than 30 days after the date of publication of these 
preliminary results of this new shipper review. See 19 CFR 
351.309(c)(1)(ii). Rebuttal briefs and rebuttals to written comments, 
limited to issues raised in such briefs or comments, may be filed no 
later than 5 days after the deadline for submitting the case briefs. 
See 19 CFR 351.309(d)(1). The Department requests that interested 
parties provide an executive summary of each argument contained within 
the case briefs and rebuttal briefs.
    Any interested party may request a hearing within 30 days of 
publication of these preliminary results. See 19 CFR 351.310(c). 
Requests should contain the following information: (1) the party's 
name, address, and telephone number; (2) the number of participants; 
and (3) a list of the issues to be discussed. Oral presentations will 
be limited to issues raised in the briefs. If we receive a request for 
a hearing, we plan to hold the hearing seven days after the deadline 
for submission of the rebuttal briefs at the U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 
20230.
    The Department intends to issue the final results of these new 
shipper reviews, which will include the results of its analysis raised 
in any such comments, within 90 days of publication of these 
preliminary results, pursuant to section 751(a)(3)(A) of the Act.

Assessment Rates

    Upon completion of the final results, pursuant to 19 CFR 
351.212(b), the Department will determine, and CBP shall assess, 
antidumping duties on all appropriate entries. The Department intends 
to issue assessment instructions to CBP 15 days after the date of 
publication of the final results of review. If these preliminary 
results are adopted in our final results of review, the Department 
shall determine, and CBP shall assess, antidumping duties on all 
appropriate entries. Pursuant to 19 CFR 351.212(b)(1), we will 
calculate importer-specific (or customer) ad valorem duty assessment 
rates based on the ratio of the total amount of the dumping margins 
calculated for the examined sales to the total entered value of those 
same sales. We will instruct CBP to assess antidumping duties on all 
appropriate entries covered by this review if any importer-specific 
assessment rate calculated in the final results of this is above de 
minimis.

Cash Deposit Requirements

    The following cash deposit requirements, when imposed, will be 
effective upon publication of the final results of these new shipper 
reviews for all shipments of subject merchandise from Chenhe, Greening, 
QTF, Golden Bird, and Yongjia entered, or withdrawn from warehouse, for 
consumption on or after the publication date, as provided by section 
751(a)(2)(C) of the Act: (1) for subject merchandise produced and 
exported by Chenhe, produced and exported by Greening, produced and 
exported by QTF, produced by Cangshan County Hongyang Vegetables & 
Foods Co., Ltd. and exported by Golden Bird, or produced by Jinxiang 
County Shanfu Frozen Co., Ltd. and exported by Yongjia, the cash-
deposit rate will be that established in the final results of these 
reviews; (2) for subject merchandise exported by Golden Bird but not 
manufactured by Cangshan County Hongyang Vegetables & Foods Co., Ltd. 
and for subject merchandise exported by Yongjia but not manufactured by 
Jinxiang County Shanfu Frozen Co., Ltd., the cash deposit rate will 
continue to be the PRC-wide rate (i.e., 376.67 percent); and (3) for 
subject merchandise exported by Chenhe, Greening, and QTF, but 
manufactured by any other party, the cash deposit rate will be the PRC-
wide rate (i.e., 376.67 percent).
    If the cash deposit rate calculated in the final results is zero or 
de minimis, no cash deposit will be required for those specific 
producer-exporter combinations. These cash deposit requirements, when 
imposed, shall remain in effect until further notice.

Notification to Interested Parties

    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402(f)(2) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this POR. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    We are issuing and publishing this determination in accordance with

[[Page 24048]]

sections 751(a)(1), 751(a)(2)(B), and 777(i) of the Act, and 19 CFR 
351.214(h) and 351.221(b)(4).

    Dated: April 22, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E8-9597 Filed 4-30-08; 8:45 am]
BILLING CODE 3510-DS-S